Posted
by
Zonkon Saturday September 15, 2007 @01:11AM
from the still-not-a-ton-of-money dept.

Arathon writes "The amazing '$100 laptop' designed by the 'One Laptop Per Child' program isn't going to make it out the door for that price. CNN reports that the laptops are now expected to cost $188 apiece when they come out later this fall. This is expected to make the program's appeal potentially much smaller, since the developers were relying on the mind-bogglingly low-price to hook governments into the concept of buying laptops for their people. OLPC's spokesman guarantees that the price won't rise further, to 'above $190'. The price differential is being blamed on raw materials costs and currency fluctuation. Is this the end of the OLPC's newsworthiness, or should we continue to hope that it will make the difference that so many have said it will?"

In 6 months it will still be a very useful machine and be a lot cheaper.

They are already buying the least expensive parts available. Parts will not get any cheaper, but they will get better parts over time. Prices for a given part follow a U shaped curve, it starts high, comes down and hits a bottom, and then starts going up again (unless it just exits the market completely). What this project will most likely do is hop from part to part to stay at the bottom of the various curves.

wrong,currency fluctuation means everything bought in foreign countries with american dollars is currently much more expensive. Perhaps noticed:http://news.bbc.co.uk/2/hi/business/6990570.stm [bbc.co.uk](this is again the price of the euro, but the situation is similar for several other currencies, I do not know where OLPC buys most of their components, but I guess they have to pay more in dollars now).

In the same respect, the OLPC should be less expensive to purchase in countries who's currency has appreciated against the USD. I'm no economist but it seems like these two factors will balance each other out to some extent.

That's simply not true," [indexmundi.com] as a very cursory search shows. Great Britain's inflation rate outpaced the US by a good measure, for example, yet the pound was and remains very strong against the dollar.

It is more accurate to say that the US dollar was overvalued for quite a few years, and that this is an overdue correction.

"And the exchange rate is driven by...?"A whole lot of factors, most of them boiling down to demand.

Central bank interest rates have some effect; they're one factor that can be used to encourage a demand for a currency.

As such, inflation is tied to, but neither exactly the cause or the effect of currency fluctuations. A drop in a currency will result in (possibly) measured inflation as the price on imports goes up, and get countered by a central bank (unless countered by deflation elsewhere), thus (possibly

Check again, 13 states now, for a total of 316 million people, also places like Monaco, the Vatican, Andorra etc which are not EU but use the Euro. Cyprus and Malta will join in January 2008. Also, a number of countries are in the European Exchange Rate Mechanism, which means that while they don't actually use the Euro, their exchange rates are linked to it within certain boundaries.

Interestingly, several countries have started to use Euro for foreign trade because of the isntability of the dollar, oddly enough including North Korea.

Currency "fluctuation", a.k.a. inflation, may raise this by $5 tops. Currency is not to blame for the constant increase of the price... and let's not kid ourselves, they've been raising the price since the start of the project.

Currency fluctuation != inflation. Did you know the US dollar lost about 35% of its value [yahoo.com] when compared to the Canadian dollar in the past 5 years? Same happened compared to other currencies. That's what makes the US price go up -- even though it's irrelevant because the laptops are

Canada is an exception, their currency went up because they are a very large producer of metals, oil , and natural gas. Prices for these goods skyrocketed on the global market, causing their currency to appreciate.

You are correct, AC. I was in Europe recently and couldn't believe how little my money got me.

Regarding the OLPC, I think people are underestimating the vast political forces that are aligned against the possibility of the immense social upheaval that would be caused by millions of third-world children watching "Peanut Butter Jelly Time".

Money involved in this project will be affected, although it should be in dollars briefly enough before being used to buy more parts and pay for assembly, that it probably won't have much effect. But I suspect they'll use euros, pounds, or some other currency that is more stable to transfer money from foreign governments to suppliers.

Even expensive laptops are not produced in the US, and the reason is costs. In the USA it would cost you $100 per laptop to just power it up, check that it works, and put it into a box. I seriously doubt that you could squeeze into this price the large amount of manual labor that assembly of notebooks typically requires. Anyone who opened a notebook knows how complicated these things are, because they are so densely packed, and you can't really automate most of the assembly steps because they require human hands and vision and touch (like the tiny Molex connectors which must be installed with tweezers.) It's best, cost-wise, if these laptops never even come close to the USA.

it doesn't matter - the US$ in the toilet (thank Mr Bush and his silly war, he's spending more than he has) - while people in the US buying stuff have to pay more people outside the US buying stuff from the US will pay a correspondingly smaller amount.

If this project included a large amount of US$ markup or a large US$ component cost it might make a difference but given its nature I really doubt it does

It's not as simple as sheer ignorant un-educated speculation.
In the information age, the propaganda artist knows that the lumpen proletariat can be massaged and managed.
If enough Chicken Littles squawk that the sky is falling, then the sky may indeed fall.
You don't actually need a tumbling sky, you need doubt about the vitality of Atlas supporting the heavens.

Yes, $188 is almost twice the $100 original cost. $100 was the goal, right? Even though OLPC didn't make its goal, $188 is still a ridiculously cheap laptop--no other manufacturer can match that (if they could, they'd be making it)--that will be benefiting people throughout the globe.

Yes, $188 is almost twice the $100 original cost. $100 was the goal, right? Even though OLPC didn't make its goal, $188 is still a ridiculously cheap laptop--no other manufacturer can match that (if they could, they'd be making it)

And that machine I link to is actually better than the OLPC. And will sell for the same price to everyone (you'll need to pay 2x or 3x the OLPC price to get it yourself). And can run Windows (XP and less) if need be.

In fact, what OLPC proved is, that commercial entities are already doing their best. Negroponte ranted left and right how the greedy vendors could make a cheap PC but couldn't, but now his dream is vaporware and he's arrived at a pretty pedestrian sublaptop, that has its analog for the same price with the good ol' commercial vendors.

I'm pretty sure that "pay twice the price thing" has no official basis and was just a petition someone started.

Also, while I'm certainly going to snap up an ASUS Eee - it looks like an awesome little subnotebook, especially since laptops that size are usually only available as fancy $2000 machines - I'd also buy an OLPC if I got the chance. Being cheap is about the only thing they have in common.

The ASUS Eee is light and has a tiny screen (even for a subnotebook) and a 3 hour battery life, while the O

Whether the OLPC project turns out to be everything they'd hoped it would be the goals of these two machines are clearly different. One is rugged, with a hand (crank) charger. It's a bit of a geek novelty, but targeted at developing nations. Places without BestBuy's and Starbucks. The other is a inexpensive micro portable (or whatever their calling small laptops this week) which will be targeted, well, probably just about everywhere else. Maybe the OLPC should have focused on a more straight forward, low-co

Sure, a Western adult would prefer an Eee - I can't wait to test drive one myself. But you omit a few other differences that demonstrate why OLPC is better for their target market - children in developing nations.

Eee development - requires conventional developer tools; system restore requires external media
OLPC development - "show source" button allows children to explore and modify most aspects of the environment with nothing more than the built-in Python editor; and versioned filesystem ensures machine can be rolled all the way back to original state with no external media support

The OLPC is very unconventional, and is much better suited to children in developing classrooms than any other machine on the market. *That* is what makes it special, not an arbitrarily low price point.

The price and specifications for the Eee PC have changed from those first announced by ASUS. The price rose from US$199 to US$249, while the base (USA model) went from 4 to 2 gigabyte solid state drive, the VGA camera was dropped and the RAM dropped from 512MB to 256MB.

I still consider both the OLPC and Eee PC to be extremely interesting. However, the rugged nature, lower power consumption, genuinely inovative interface, mesh networking and superior security model makes the OLPC a tr

Are you sure the hand charger is standard with the OLPC? CNN mentioned something about a pull string, but the OLPC website [laptop.org] says this cryptic thing:

True, early prototypes included a hand crank, but it was removed in subsequent versions. The actual shipping units will use an off-board human-power system, connected to the power brick. Candidates include a foot-pedal charger similar to the Freecharge portable charger, solar panels, a crank, and a pulley system.

This leaves the impression that they haven't even worked out what this manual charging method will be, and might be leaving it for future editions of the OLPC. If this is wrong, can someone post a link that shows the manual charging system?

Does the Asus have its own manual power source, like the OLPC's crank or pedal? Nope? There goes everyone in the world without reliable electricity.

Does it have super-idiot-proof software? Not really. Heck, even I (as a fairly experienced computer-user) don't instantly understand half of OpenOffice's features. How is that gonna work for people who've (a) never used a computer before and (b) have no access to tech support?

Is it durable? Like, durable enough to make up for the fact that some potential users would have no access to any sort of computer repairs?

And so on. I'd personally prefer the Asus one, living here in the US with regular electricity, WiFi, and so on, but a whole lot of the OLPC's target audience would be using the Asuses (Asi?) as paperweights pretty quick.

(1) The ASUS Eee PC is priced at $249. That is 30%+ more expensive than the OLPC XO-1.

(2) The ASUS Eee PC *only* *exists* because Intel hates the AMD-based OLPC project. Intel created and funded a competitive reference platform, the Classmate PC, and this forms the basis for the Eee PC.

Of course, the OLPC is a non-profit social welfare program that actually achieves its goals when it forces Intel to dramatically drop prices and cut zero-profit deals with the likes of, say, Pakistan.

This is not irony. This is *accomplishment*.

And yes, I'll be buying an Eee, and thanking *Negroponte* -- not Intel -- for making it happen.:D

"Better" in raw performance spec. But I very much doubt it will be as durable, easy to repair, have as long battery life as the OLPC. Give one of each to two village kids and in 6 months see which is working, which is a doorstop.

I'd hesitate to write off the OLPC just yet. It is not a general purpose machine and wasn't intended to be. Third world children need a different laptop than the rest of us do. If the technology works out to be a better fit, that's still a big win. Also, $11 isn't much difference in price, but $11 times 1 million units sure as hell is. As much as your cynicism wants to kick in and declare all good efforts to be worthless, I'd hold on for a few more years to see what actually shakes out of this endeavo

In fact, what OLPC proved is, that commercial entities are already doing their best. Negroponte ranted left and right how the greedy vendors could make a cheap PC but couldn't, but now his dream is vaporware and he's arrived at a pretty pedestrian sublaptop, that has its analog for the same price with the good ol' commercial vendors.

And did you see any companies working on ultra-cheap laptops before OLPC demonstrated there was a demand? I'd betcha a shiny nickel that you would have been laughed out of the boardroom if you suggested that sort of thing before OLPC was announced. With the massive public interest in what OLPC is offering, even an idiot CEO would sit up and take note. "Hmm, costs 1/8th of our low-end laptop, market studies say we could increase sales volume by 16x, we might just have ourselves an idea here."

>> In fact, what OLPC proved is, that commercial entities are already doing their best.That's a load of crap. The Eeee!!!!!! didn't exist (hell, wasn't even on the drawing board) when the OLPC announced its intentions. Nor was Intel's Classmate PC. Commercial vendors have had the ability to make such ultracheap PCs for a long time now, but they didn't break down and do it until the OLPC made such machines inevitable. Before that, laptop manufacturers knew that each ultracheap machine they made wou

Negroponte ranted left and right how the greedy vendors could make a cheap PC but couldn't, but now his dream is vaporware and he's arrived at a pretty pedestrian sublaptop, that has its analog for the same price with the good ol' commercial vendors.

Vapourware? That's weird. You see, I have an XO laptop sitting right here on my desk. It's remarkably massy, compared to most vapour.

I've been testing the laptop for almost a month now. In fact, when my other 'real' laptop's wireless went south, I switched t

ASUS=Taiwan. Where do you think the OLPC will be made? Taiwan--just like everything else! The manufacturer makes just about every other damned laptop, too. So, how, precisely, do you believe inflation of the U.S. dollar (currently 2.5%) is strongly related to third party prices from a foreign manufacturer, who is in an country with an inflation rate one fifth of that of the US? Put the facts where your mouth is.

Secondly, contrary to what you're blathering on about earlier, the ASUS EEE and the OLPC are hardly comparable. They don't target the same users or market. The OLPC is designed to be eminently durable (it's well sealed against dust and water), to last a long time on battery (it gets 2000mAh more than the OLPC to get 3 hours run time vs 5+ the OLPC offers), it has a monitor that's better suited to reading textbook style information on the computer, and is designed to have incredible wireless range, so it can serve as a mesh network node. And the ASUS recently became more expensive-$199 to $250.

You need to learn that "better" is a subjective metric when you're comparing stuff like this. Is a Cray faster at computing stuff than the computer on your desk? Absolutely--but that doesn't mean that a Cray makes a good desktop machine, any more than a desktop makes a good super computer. Each is completely unfit for the other's job. Apple and oranges.

People WITH ELECTRICITY might be better off with an EEE (better know as Intel's answer to OLPC).

For those without, as keeping it powered-up will easily cost more than the laptop in no time.

And that's not even mentioning the infinitely more flexible and durable hardware of the OLPC that will stand up to abuse from children, or the incredible (open source) educational software and interface it comes with, and the hardware that ties in with it.

That's nonsense. You're mixing up currency fluctuations with inflation. Go use the handy inflation calculator [bls.gov] courtesy of Uncle Sam to find out that $100 in 2002 has the same buying power as $115 today. Now, you can argue about how governments calculate inflation or even what inflation is, but it's definitely not that high.

Fact is the OLPC missed its $100 target a long time ago. There were a couple of "sacred cows" that were enormously expensive resource wise and which they raised the specs to accomodate

We've discussed the price increase on slashdot before. The problem is the hardware, but not because all hardware is inherently expensive.

It's OLPC's recent goal of being operating system agnostic, rather than linux specific. We know that specially tailored linux distributions can run on very old (and very cheap) hardware, but Windows and OSX can't. If the goal is to be able to run any operating system, then the specs have to be pretty recent, and that means more expensive hardware.

The issue is that OLPC are pressured into running Windows by American and other rich Western schools that like the idea of buying a cheap PC and don't care that much if the price is $100 or $190 as a result.

$90 is 90 days pay for poor people who live on $1 a day [wikipedia.org]. In those countries, the governments will never buy massive numbers of OLPCs, and at $190 a pop they'll even buy a whole lot less of them.

"We know that specially tailored linux distributions can run on very old (and very cheap) hardware, but Windows and OSX can't."

The OLPC has 256 MB of ram, and 1GB of flash memory. It can't run either of those operating systems. If they were trying to make it run these operating systems, they did a really poor job.

"The issue is that OLPC are pressured into running Windows by American and other rich Western schools that like the idea of buying a cheap PC and don't care that much if the price is $100 or $190 as a result."

That is speculation and it probably isn't true. I'd doubt reducing the hardware specs would make the laptop any cheaper. It just costs a certain amount to money to put a laptop together, and there's no amount of spec and feature reduction that can change that. The truth is that OLPC was largely unaware of the difficulties this kind of project would face. OLPC set an unreasonable goal for the price, and now they're coming to terms with the reality of the situation. Initially OLPC had said that the market wouldn't produce an inexpensive laptop because the profits weren't there. It turns out that the market wasn't making them because it's not possible.

That's exactly my point. Who dreams up these sorts of specs? How about
256 flash and 32MB ram? That's plenty enough if you want a usable computer, just not a usable Microsoft or Apple system. There are plenty of microlinuxes that can be installed on those sorts of specs. They could easily cut out
$50 that way. Instead, they blame the market for high prices on higher than necessary specs. Duh.

"How about 256 flash and 32MB ram"How much do you think the 1GB flash and 256MB or ram are adding to the cost of this machine? I could buy them (not in bulk) for about $30. Do you honesty think it would be appreciably cheaper to use 256 and 32? It would cost a few dollars less at most (the cost of ram is not proportional to the amount purchased, as ram must be built in modules), and dramatically limit the functionality of the machine.

"One of the nice things with older hardware is that the factories alrea

The price of the OLPC laptop is becoming a recurring subject. I think the price of the laptops is important, but not the most important story to tell. The OLPC laptop has already revolutionized the design of the laptop. On the hardware side we have the extreme power efficiency, the high resolution screen, the cranking mechanism, and last but not least the ergonomic, rugged design. On the software side there is the open firmware, the mesh network, the new user interface, Bitfrost, and probably a few other things I forgot. And all of this is made possible by open source software. The OLPC laptop has set a new standard, and none of the so called competitors from Intel, or other manufacturers comes even close. The competing machines are just cheap standard laptops, with none of the qualities that make the OLPC laptop special. Whatever the price of the laptop, and even if the whole project ultimately fails, the design of the OLPC laptop will have an enormous impact on the future of the PC. And because it is all open souce we can build on its foundations. All of that is much more important than todays price of the hardware.

The OLPC laptop has already revolutionized the design of the laptop. On the hardware side we have the extreme power efficiency, the high resolution screen, the cranking mechanism, and last but not least the ergonomic, rugged design.

Oh, geez, cut it. It's just an average motherbord with standard components. People build more advanced machines in the embedded market, every single day.

So why, then, does everyone who sees the prototype I've been demo-ing walk away with stars in their eyes?

I've been working in ICT for over 15 years, and I've spent years in some of the most remote areas in the world, trying to extend the reach of the Internet in a way that's useful to the people who live there. Let me tell you that in all that time, I have never encountered anything quite so well-designed for its task as the XO laptop.

Ok, so if you ask Palm to sell without intermediates on one millon bulk, directly to goverments, Im prety sure they can get it down to sub U$S:50 for the Palm Zire 22. It already have some networking capabilities with IR, but with the remaining U$S:50 you can also add some 802.11b networking.Im not afiliate to Palm by any means, it is just that I hate when people reinvent the wheel... I just see this all OLPC circus so unfair to currently existing technologies...

To promote something at a given price range and then have development over runs and resulting higher costs?Its like a bait and switch program or methodology.What I don't get is why play this game at all?

If an company has been manufacturing pretty much the same thing for years in a mature industry, maybe they've figured out realistic cost estimating.However, I work in the construction industry, and I can guarantee you that they haven't figured out realistic cost estimating yet.

Of course this is bad news. And I don't know how most countries are going to react to this.
But I still plan to buy the OLPC for myself. It's a completely open platform, a portable and rugged design and I will support a good cause when I buy it.

Now, I hope all of you here have heard about an economic phenomenon called inflation - the process where governments inflate money supply making your dollars buy less. Very few know that for the past decade or so the government has been massaging the official inflation numbers to make them appear lower - this allows them to make fewer and fewer payments on inflation adjusted liabilities such as social security. However, they still publish all the numbers one needs to calculate the actual inflation, and some people have been doing that, look for example here:http://www.shadowstats.com/cgi-bin/sgs/data [shadowstats.com]Notice how inflation has been running steadily at about 10% for the last few years. Today, the engineers who drafted the 100$ plan in the end of 2004 / beginning of 2005, should expect the cost to be 100*1.1*1.1*1.1 or roughly 135 dollars.That already would take a lot of sensationalism out of the story. However, let's not stop here. Remember, the real culprit behind inflation is the money supply, and consumer inflation is usually the latest to price rising party. The money supply (as you may have noticed from previous link) has been running at 14% annually, causing serious mischief in prices of things like energy (http://www.investmenttools.com/futures/energy/index.htm) or metals (http://www.investmenttools.com/futures/metals/welcome_to_the_page_about_copper_futures.htm) - both are important for making technology.Just for the sake of an example, let's trivialize the problem a little, and say that to make a laptop you need to spend 60% of your budget on metals, and 40% on energy (it's wrong, but I am just making an example). What would you expect to happen to the price of such laptop according the charts I linked to? Well, it would go up from 100$ to slightly over 200$.

So what is the real story here, engineers screwing up their designs, or governments inflating away the buying power of the dollar making the same thing cost twice more over 3 years?Look at my links, do your research, decide for yourself.

The price differential is being blamed on raw materials costs and currency fluctuation.

If it is mostly raw materials, I suppose there is only so much a person can do. If it is currency fluctuation, maybe they should price it, and should have priced it to begin with, in euros. Everyone knows the dollar has been sinking for years.

This has been known for a while. Their plan is to release it now cause they finally decided to go with features rather than cost. It still has a hard drive cranks for when power is unavailable. It has a bunch of design goals that are NOT the same as other cheap laptops. It's meant to be rugged, water resistant, wireless that can span miles to provide (very slow) internet in places that wouldn't otherwise support it.They already have a bunch of orders for other countries that are buying millions. Their plan

I believe the thought is that the previous attempts to provide infrastructure, hospitals and contraception have done little to impact the overall situation in Africa.This attempt attempts to provide access to education and communication, with the thought that a better educated populace that has access to communication and technology would be able to improve their own quality of life.

Kind of like the "give a man a fish/teach a man to fish" adage. Plus, giving a community contraception and hospitals are real